How To Open A Time Deposit Account In Post Office

Post office Time Deposit Account is nothing but similar to bank fixed deposits only. One can deposit money for a particular period and get a fixed rate of interest on the deposited money. Generally Time Deposit Account in post office have various duration starting from 1 year, 2 year , 3 year & 5 year duration. Like 5 year tax saving bank FDs, you can also get income tax saving benefit when you open a 5 year Time Deposit Account in post officeunder section 80C of income tax act. Let’s explore various key features of fixed deposit account in post office.

Eligibility & Interest Rate of Time Deposit Account in Post Office

Interest payable annually but calculated quarterly.

From 1.10.2016, interest rates are as follows:-

Period

Rate

1 yr. A/c

7.0%

2 yr. A/c

7.1%

3 yr. A/c

7.3%

5 yr. A/c

7.8%

Deposit Amounts​ are as follows:-

Type of Account

Minimum Deposit

Maximum Deposit

1, 2, 3 & 5 Year TD

INR. 200/- and in multiples of INR. 200/- thereafter

No limit

Key highlights of Time Deposit Account in Post Office

Anyone can open a TD account in post office.

This is a one-time deposit account and one can put lump-sum amount in cash and cheque. After demonetization, there has been certain restrictions applied cash deposit, so better to go with cheque payment in case the Time Deposit Account amount is very high.

You can provide a nominee to your post office FD scheme at the time of opening or even later on.

Account can be transferred from one post office to another.

Any number of accounts can be opened in any post office. If you are opening TD account for tax saving purpose, better to open 1 TD with the highest tax slab limit of 1.5 lakh, in case you don’t want to put your money in any other instrument.

You can open a Time Deposit Account in post office in the name of minor also, in case the age is below 10 year.

A minor of age 10 or above can open and operate the account.

Joint account can be opened by two adults.

Interest payable annually but calculated quarterly.

Single account can be converted into Joint and Vice Versa.

Minor after attaining majority has to apply for conversion of the account in his name.

In case you have opened a Time Deposit Account in CBS or core banking system post office branch, after maturity your TD account will be auto-renew for next 2 years. If you want to get the money after the maturity of TD account, then better contact your post office before maturity and take necessary action to get the money deposit in your post office savings account after maturity.

How To Open Time Deposit Account in Post Office

You can download the post office term deposit account opening application form online, visiting the link here.

Attach the Address and identity proof such as copy of the passport, PAN (permanent account number) card or declaration in form No 60 or 61 as per the Income Tax Act 1961, driving license, Adhaar Card, voter’s ID or ration card.

Don’t forget to carry original identity proof for verification at the time of account opening.

It’s better to provide a nominee at the time of opening the account. Provide the nominee details and complete the process.

Post Office Time Deposit Vs Bank 5 Year Fixe Deposit Scheme – Which One To Buy?

Well, according to me both are same product and interest rate point of view also its almost same only. May be you can find some Bank FDs with little higher interest rate. A clear difference is one don’t have to pay any TDS on maturity value from post office TD account, where bank tax saver FDs will attract TDS. From return on investment point of view, both are not liquid and have lock-in period of 5 year with a guaranteed moderate return. You may opt them for tax saving option, in case you don’t want to explore other alternatives available in section 80C. What is your reason to invest in a time deposit account in post office? Write a comment below and share your feedback below.